Oil prices extend losses as market remains oversupplied
LONDON - Oil prices fell further Thursday as the market was awash with ample US supplies and the dollar strengthened, dealers said.
US benchmark West Texas Intermediate (WTI) for delivery in March shed $1.32 to trade at $49.09 a barrel compared with Wednesday's close.
Brent North Sea crude for March slid $1.12 to stand at 55.28 a barrel around midday in London.
Crude prices on Wednesday snapped a three-day rally, with WTI sinking 8.7 percent owing to climbing US crude stockpiles.
Analysts said prices are weighed down also by the euro's fall on news that the European Central Bank had cut off Greek banks' access to a key source of much-needed cash.
In a decision that rattled global financial markets, the ECB said Wednesday it would no longer allow Greek banks to use government debt, which has a junk rating, as collateral for loans.
"The Greek situation is worth keeping an eye on as it massively impacts the value of the euro against the US dollar," said Shailaja Nair, associate editorial director at energy information provider Platts.
A sinking euro makes dollar-priced oil more expensive, denting demand and adding downward pressure on crude prices, which have already been battered by a supply glut and weak demand.
Crude has lost more than half its value since June, when prices were at more than $100 a barrel.
Global supplies have been boosted by surging US shale oil production and a decision by the Organization of the Petroleum Exporting Countries in November to keep current output levels.